Singapore’s Pan Pacific opens new hotel in Yangon, remains confident of long term ROI

Wee Wei Ling, executive director of Pan Pacific Hotel Group, isn’t at all worried about the glut in hotel rooms in Yangon. “There is definitely an oversupply. In fact, tourism has been declining recently. But we are long-term investors in Myanmar. We see the potential of this country and we would like to grow with it. That is why we are here,” she said.

Owned by Singapore-listed property conglomerate UOL Group, the company opened Pan Pacific Yangon last month, amid an unfolding humanitarian crisis in northern Rakhine, which has deterred some investors and tourists from entering Myanmar.

The 333-room luxury hotel is part of the Junction City Yangon mixed-development project by Shwe Taung Group and Keppel Land and took more than 3 years to build.

The opening of Pan Pacific Yangon also came after several new luxury hotel openings in the city, including South Korean Lotte Group’s Lotte Hotel on Pyay Road in September. Meanwhile, handful of other hotels in the same space, such as Kempinski Yangon by Germany’s Kempinski Group and Pullman Yangon Centrepoint by French group AccorHotels, are also scheduled to start operations within the next few months.

The new hotels join many other existing full-service ones in Yangon, including Novotel Yangon Max, Rose Garden Hotel Yangon, Sule Shangri-La Yangon, Sedona Hotel Yangon, Melia Yangon, Chatrium Hotel Royal Lake Yangon and ParkRoyal Yangon, which is also run by the Pan Pacific Hotel Group.

Rising competition

Ms Wee said rising competition in the sector should force each player to sharpen its strategy and find its own niche to draw new customers and retain existing ones. “The more competition, the better. We each just have to find our own niche,” she said.

Pan Pacific Yangon’s edge is its location in the heart of town and proximity to the Junction City Shopping Mall. It is also marketing itself as a luxury hotel for corporate travellers. “Travellers who visit Yangon will be familiar with the Pan Pacific brand and its association with comfort and luxury,” Ms Wee said.

The strategy for ParkRoyal Yangon, located on Alan Pya Phaya Road, is a little different. “It is more for returning locals and families. People come back to our hotels because of the staff and the little things that they do, like greeting returning guests by name and remembering details like how they like their breakfast,” Ms Wee said.

“People come back to certain hotels because of the staff. They may try out a new hotel every now and then, but they usually go back to a hotel they feel comfortable with. We are certainly seeing this for ParkRoyal.”

Long term plans

Although competition is rising and while tourism recently took a hit, capital investments have continued to flow into the hotels Pan Pacific Hotel Group operates in Yangon.

In fact, renovations have been taking place at the ParkRoyal for over a year now. “Before last year, the number of ParkRoyal patrons was rising fast. So we decided to renovate the hotel. Since then, things have slowed. But we are renovating for the long term,” said Ms Wee.

The group is now developing Small Office, Home Office (SOHO) units on the ParkRoyal Yangon tennis court grounds. “As the tennis courts are under-utilised, we are now building SOHOs there as we see rising demand for these properties, as opposed to 1 or 2-room suites like in the past,” she said. The units will be ready by February 2018.

More importantly, the Pan Pacific Hotel Group enjoys strong shareholder backing. UOL is among Singapore’s largest property developers, with real estate projects across the world. The company also runs a third hotel in Myanmar, the ParkRoyal Nay Pyi Taw.

UOL is controlled by the Wee family, which is also one of the richest families in Singapore. The Wees also own United Overseas Bank, the country’s oldest and largest bank.

For the nine months to September 30, 2017, UOL announced revenues amounting to S$1.3 billion, up 18 percent over the same period last year. Earnings hit S$847.9 million, which is up 2.5 times year-on-year. Still, the company warned in its financial statements that its hotels, including those in Myanmar, “continue to face competitive pressures and oversupply of rooms.”

While that will keep further expansion plans in Myanmar on hold for now, Ms Wee stressed that things will eventually pick up. “UOL is a long term player in the Myanmar market. Running 3 big hotels here is a big investment, but we are not worried about the money and reaping a return on investment (ROI). This shows we are confident and comfortable with the government despite the violence,” she said.

When it opened 2 years ago in ParkRoyal Yangon, Si Chuan Dou Hua was one of the first authentic Chinese restaurants in the city. Now, with a larger number of similar restaurants such as Crystal Jade opening up, it is upping its game.

“We are moving up to a different level to set ourselves apart from the competition. We think people like Chinese cuisine and the traditional round table, private room setting so we have brought in a Cantonese chef to guarantee the authenticity of the cuisine,” aid Wee Wei Ling, executive director of Singapore-owned Pan Pacific Hotel Group, which owns Si Chuan Dou Hua.

With Chinese New Year around the corner, Si Chuan Dou Hua is also working on improving the quality of existing dishes like suckling pig and roast duck, as well as introducing new dishes which are popular with the Chinese.

The company is targeting middle to upper class local consumers. “Chinese cuisine has evolved into a larger part of local dining. Demand and competition are rising so our food quality must be good,” said Ms Wee.

“We will import certain ingredients but use local ingredients from the wet market as much as we can.”

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